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From your daily latte to your mortgage payment, where can you make changes to improve your credit? Here are a few pointers for keeping your credit in check: 

Home and Automobile

Don’t bite off more than you can chew when it comes to purchasing a new car or home. If you begin missing payments, it will not only be challenging to catch up on what you owe, you may face repossession or foreclose, which severely impact your credit.

Daily Vices

Some vices are more harmful than others. Drinking and smoking not only cost you thousands of dollars a year, they are damaging to your health. Other daily vices like your morning coffee and going out to lunch everyday may not affect your physical health, but they do affect your credit health. Cut back on these daily expenses and use the money you save to improve your credit scores by paying off a debt.

Cell phones

We love our phones, right? But if you’re exceeding your data plan, expect to get slammed with some serious fees. If your bill exceeds your budget and you begin to miss payments, you won’t only have your service shut off, your bill will go to collections and affect your credit.

Defaulting on student loans

New graduates having a difficult time finding a job may wonder how they are going to make their student loan payments. Your lender may be able to make adjustments to your payment schedule but you have to contact them, not just put your head in the sand! By not making payments you can face wage garnishment and your credit will be majorly affected.

Credit Cards

Credit cards are a great financial tool but there are some serious pitfalls you need to avoid.

  • Check your statements: Look for inaccurate charges (possible identity theft) and analyze where you are overspending.
  • Don’t max out your credit card: Keep the amount of debt you owe below 30% (ideally 10%) of your available credit limit.
  • Don’t collect credit cards: Each application you submit for a new line of credit results in a hard inquiry being placed on your credit history, which affects your credit
  • Don’t charge everything you buy: It’s so convenient to use your plastic for everything. But then the bill comes and “whoa” did those little purchases really add up! Think about each purchase before it’s time to pay and decide when it is best to use a credit card and when it is best to use cash.
  • Don’t spend to get rewards: Cash back? Airline miles? Sounds great, right? Maybe not. A lot of these cards carry higher interest rates and annual fees that may not make up for those “perks”.
  • Control your online shopping: Easy and convenient, but possibly a budget buster. Uncontrolled online shopping can lead to maxed out credit cards which will affect your credit score.
  • Pay more than the minimum balance: Paying only the minimum balance means you are accumulating interest charges on each billing cycle. However, paying the minimum balance is always better than skipping a payment.
  • Don’t close credit cards: Don’t close that account! If you don’t want to be tempted, cut up the card, but closing an account harms your credit.

Improving your credit now will result in better terms and conditions on your future loans, credit cards, and credit lines. What changes are you going to make to improve your credit? Give us a call at Buffie the Tax Heiress today.

Smooches,

Buffie